IIS: Error while Accessing IIS virtual directory on another server through localhost/folderRSS

We have 2 servers, In server1, IIS configuration has a virtual directory which has the HTML page of the URL.

In server2, IIS configuration the virtual directory points to the directory in server1(same directory configured in server1).

while accessing the URL by localhost in server1 displays a General error as mentioned in the config file, whereas accessing the URL by localhost in server2 displays Runtime error(mentioned below) although it points to the same config which server 1 points. There is no access issue between the servers.

Server Error in '/' Application

Runtime Error:

Description: An exception occurred while processing your request. Additionally, another exception occurred while executing the custom error page for the first exception. The request has been terminated.

Manually When I append the html pages (GeneralErr.htm) in the same url http://localhost/subtest/GeneralErr.htm, the page gets loaded sucessfully.

But While hosting the url http://localhost/subtest from server 2 getting the below error  - Getting access error or runtime error

Configuration Error

Description: An error occurred during the processing of a configuration file required to service this request. Please review the specific error details below and modify your configuration file appropriately.

Parser Error Message: An error occurred loading a configuration file: Failed to start monitoring changes to '\\server1\c$\test\subtest' because access is denied.

Regarding IIS configuration for virtual directory

using IIS8 version

In Server1 folder structure: c:\test\subtest

In Server2 : IIS configuration for virtual directory "subtest"

Physical Path : \\server1\c$\test\subtest

Physical Path Credentials: domain\username

Virtual Path: /subtest

Webconfig:

<?xml version="1.0" encoding="UTF-8"?>

<configuration>

  <system.webServer>

    <directoryBrowse enabled="true" />

    <httpErrors>

      <remove statusCode="500" subStatusCode="-1" />

      <remove statusCode="404" subStatusCode="-1" />

      <error statusCode="404" prefixLanguageFilePath="%SystemDrive%\inetpub\custerr" path="404.htm" responseMode="File" />

      <error statusCode="500" prefixLanguageFilePath="%SystemDrive%\inetpub\custerr" path="500.htm" responseMode="File" />

    </httpErrors>

  </system.webServer>

<system.web>

 <customErrors mode="On" defaultRedirect="/GeneralErr.htm">

  </customErrors>

</system.web>

</configuration>